The Tesla Take on ‘Sharing’ the Wealth

Elon Musk, the world’s single richest individual, believes in sharing the wealth. Or so Tesla chief financial officer Zachary Kirkhorn can certainly attest.

Kirkhorn announced earlier this month that he’s stepping down after four years as Tesla’s CFO. Over those four years, Kirkhorn has pocketed some $590 million, a tidy sum that averages out to an annual take-home not all that far from $150 million.

But Musk’s share-the-wealth inclinations, Tesla workers can attest, don’t extend much beyond Tesla’s executive suites. Workers at Tesla plants all labor without union contracts. They earn per hour from Tesla about one-third less than what workers at Detroit’s unionized Big Three auto makers are making.

Workers at those Big Three firms ― General Motors, Ford, and Chrysler, now part of the new auto group Stellantis ― are now feeling Tesla’s low-wage pressure. Their union, the United Auto Workers, has begun bargaining a new Big Three contract, and those negotiations, a Reuters analysis noted last month, most definitely have Musk’s Tesla as a shadow participant.

Tesla’s shadow, adds Reuters, has essentially replaced the looming presence of the “Japanese automaker Toyota and its lean production system.”

That analogy between today’s Testa and yesterday’s Toyota only goes so far. The Tesla and Toyota shadows have impacted Detroit’s top auto execs in strikingly different ways. Toyota posed a personal threat to Detroit auto execs. Tesla offers those execs a personal opportunity.

Toyota’s threat came on the executive compensation front. Japanese corporate chiefs have over recent decades consistently made substantially less than their U.S. counterparts. In 2012, for instance, Toyota’s top exec pocketed $1.8 million. Ford’s CEO that same year took home nearly $21 million.

This past June, Toyota’s top-paid exec, Akio Toyoda, saw his annual compensation rise to an all-time Toyota executive pay record. His take-home: $6.9 million. The 2022 total take-home of GM’s CEO: $29 million.

The mega millions that go to Tesla’s top execs, by contrast, provide top execs at America’s unionized auto companies a much more personally useful payday benchmark. The UAW, these execs are now demanding, must allow their companies to be “competitive” with the likes of Tesla.